BlackRock has expanded its suite of exchange-traded funds (ETFs) with the launch of the iShares MSCI World Utilities Sector Advanced UCITS ETF (WUTS), an ESG-integrated strategy targeting global utility companies. The fund is now trading on Euronext Amsterdam with a total expense ratio (TER) of 0.18%.
WUTS provides exposure to 51 utility sector stocks across 23 developed markets, tracking the MSCI World Utilities Advanced Select 20 35 Capped Index. The ETF is available to investors in the UK, Austria, Denmark, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Norway, Spain, Sweden, and Switzerland.
The underlying index is designed to enhance exposure to positive environmental, social, and governance (ESG) factors by 20% while cutting carbon-equivalent emissions and fossil fuel reserve exposure by 30%, relative to its parent index. To ensure diversification, the index limits the combined weight of the largest holding to 35% and other individual holdings to 20%, with a 10% buffer applied at each quarterly rebalancing.
Despite its ESG tilt, the index has shown mixed performance. Over the past decade, it has underperformed the broader MSCI World Utilities Index by 1.5%. In 2023, it returned 3.6%, ahead of the 0.3% gain in the parent index, though it lagged in 2022 with a 13.1% decline compared to the broader index’s 4.7% loss. Last year, the ESG-tilted index posted a 4.4% gain, trailing the 13% rise in the MSCI World Utilities Index.
The WUTS launch follows BlackRock’s recent unveiling of a 3% capped-weighted S&P 500 ETF, aimed at providing more balanced exposure by capping individual constituents at 3% during each quarterly rebalancing.
BlackRock remains the largest ETF provider in the U.S., with 468 listed ETFs representing over $3 trillion in assets under management.
